Gold purchases from central banks have been up 73 percent higher year on year, with China, Russia, Turkey, and Kazakhstan’s banks leading the charge.

According to new stats from the World Gold Council,  while the net tonnage for May is down 27 percent month on month to 35.8 tonnes — this has done nothing to dampen the overall appetite for bullion from central banks.

Russia has bought 77.1 tonnes of bullion so far this year, China has bought 63.8 tonnes, Turkey has bought 49.3 tonnes, while Kazakhstan has bought up 20.5 tonnes.

Other central banks which have increased their gold purchases since 2016 include Uzbekistan, Serbia, the Kyrgz Republic, India, Hungary, Greece, Egypt, Colombia, and Belarus.

But it’s the increase from Russia and China which will be raising eyebrows.

While gold has been on a tear this year, it’s also typically seen as a hedge for geopolitical instability of falling interest rates.

READ: The relationship between rates and the gold price 

Interestingly, while the scope of the WGC report covers off on May, there are reports that Poland bought a whopping 95 tonnes of the precious metal in June

Given June was a bumper month for gold and the gold futures market, the demand from central banks could go some way towards explaining the rise.

This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.